- The AUD/USD rallied a bit during the trading session on Thursday, as we have seen multiple days in a row. However, unlike the other days this week, we have seen the Aussie be able to hang on to December the gains.
- This is a positive turn of events for the Australian dollar, but it’s also worth noting that there are that many people out there trading.
- After all, most people were worried about the new year holiday, and not so much about trading currencies.
We are currently stuck between the 50-Day EMA underneath in the 200-Day above. This generally will cause a bit of a squeeze in the market, and therefore you need to be aware of the fact that we will eventually get an explosive move. If we break above the highs, then I think we go looking to the 0.70 level where we will reset the battle. On the other hand, if we break down below the 0.66 level, then it’s likely that we go down to the 0.65 level where we had seen a lot of resistance previously, so would make a certain amount of sense that we have “market memory” coming into the picture there.
Be Cautious
Regardless, I think this is a market that going to be very choppy over the next couple of days so I wouldn’t get overly aggressive one way or the other. Member, the Australian dollar is highly sensitive to China and with China reporting 37 million new cases of coronavirus daily, that’s not good luck. Ultimately, think this is a scenario where we will probably see a lot of back-and-forths and then a sudden impulsive move.
That impulsive move could, after the jobs number on Friday, or late next week. Between now and then, I don’t read too much into any of the price action, and I suspect that the volume will be anemic at best. Be cautious with any positions that you have, because a sudden announcement could throw the markets into disarray, and that could cause a lot of damages that you would not normally have to deal with in a normal environment. I believe that we are trying to top out in this market, we just don’t have the catalyst to make it roll over for any type of significant moves.
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